Newly Engaged This Holiday Season?

Image courtesy of Boykung /

By Kimberly Napolitano

Maybe it’s the mistletoe…  Among the holiday cheer and merriment, engagement rings seem to be the gift to give around the holidays and New Year.  After the excitement of hearing her say “yes!” dies down, there are some not-so-exciting topics that need to be understood about the potential financial and legal marriage in the future.

Whether you find yourself newly engaged or whether it is your family member or dear friend, it is important to make sure that some ground rules of the upcoming nuptials are understood.

Myth:  We already agreed not to get a prenup so we don’t need to consult an attorney.

Truth:  Even if you don’t want a prenup, it is wise to understand the financial and legal impact of your marriage.

Even if a prenuptial is not desired to protect separate property you’re bringing into the marriage, it is important for the couple to understand that marriage can affect many situations.  By far the least understood result of marriage is that the new spouse generally becomes immediately liable for any debts of their new spouse.  Beware:  you are not only marrying a person, but maybe a whole litany of credit card and other debts.  In addition, in the absence of estate planning to the contrary, the State of California presumes that you want to leave some, if not all, of your property to your new spouse in the event of your death.  This may be ok for some, but for others – especially those folks with children from a prior marriage – this may not be how you want your assets divided.

Myth:  If we just keep our accounts separate, what’s mine is mine and what’s my spouse’s stays my spouse’s.

Truth:  Just because you place money in an account in your name does not make it your separate property. 

California is a community property state and generally the earnings of both spouses are considered as belonging to the “community” regardless of what account they may be deposited in.  Worse yet, if you do have separate property (generally, property you owned before marriage or received by inheritance) and you mix your earnings on the separate property with income you receive from your work, skill and effort (i.e., your 9-5 job), then you may have “commingled” funds and what’s yours might have just become half your spouse’s.  The bottom line:  this is a tricky area and it would be wise to seek the advice of an attorney to determine what you protections are available to protect your separate property.

So, before you read all the bridal magazines…

Take a moment to consider the unique financial and legal situations of the couple.  Honest and open communication about these financial issues is a great way to head into marriage.  And, maybe more importantly, it’s a great skill you’ll need throughout your marriage.  Meeting with an attorney before the big day can help prepare you for one of the greatest moments in your life and educate you about what it really means to sign your marriage license and commit, for better or worse, to each other for a lifetime.

Kimberly Napolitano, concentrates on the representation of individuals and families in all aspects of estate planning, business succession, asset protection, and the reduction of tax burdens.

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